The federal government has revealed it will join legal proceedings designed to clarify the situation over casual employee entitlements and the claim that some are allowed to double-dip on pay.
Jobs Minister Kelly O’Dwyer said during a press conference that Commonwealth will become a party to Federal Court proceedings testing whether casual workers have the right to double-dip by being granted leave accrual as well as casual loading.
The situation arose after labour hire firm Workpac found itself at the centre of a nationally significant court ruling that certain casual employees should not be deemed casual and, as such, deserve to be paid accrued leave entitlements in line with permanent employees.
That verdict sparked an outpouring of shock, fear and confusion among employers.
“I, as minister, have decided to intervene to make the Commonwealth a party in this test case before the Federal Court of Australia, and the case will be considering whether an employer can be required to pay twice for the same workplace entitlement,” Ms O’Dwyer said.
“The government is very concerned that the legal right to offset an obligation against payments already made for the same entitlements was not dealt with in the Skene v WorkPac case. And we want to make sure that in this case, that there is clarity and certainty for employers and for their employees.
“It’s got to be really clear that there is a common law right to offset for those small businesses if they face claims to pay twice for the same workplace entitlements. And we know that this particular case has caused great alarm for small businesses right across this country.”
As Ms O’Dwyer pointed out, greater compliance with the law is only achieved when there is certainty about what the law actually stipulates.
In response to a journalist’s question about the ruling that casual employees are not deemed to be casual if they are in continuous employment - in which Ms O’Dwyer was asked “shouldn’t you respect the decision of the Federal Court?” - the Minister re-emphasised the need for certainty.
“We’re very specifically focused on the offsetting arrangements and whether businesses are going to be paying people twice for the same entitlement. If you’re a casual and you’ve been paid 25 per cent loading, it seems completely incongruous to think that that 25 per cent loading that would have paid for your holiday pay and all the rest, that you would also equally be paid for those holidays and other entitlements,” she said.
“It’s generally one or the other, but not both. And the certainty needs to be made very clear.”
Ms O’Dwyer added: “I think most fair-minded Australians actually understand that. And certainly the anxiety that this has created amongst small businesses right across the country is one that needs to be settled and settled very quickly.”
Business Council chief Jennifer Westacott hoped the ruling will once and for all bring clarity to the issue.
“Recent federal court rulings have left many businesses, particularly smaller ones, without the clarity they need to keep growing and creating jobs, we welcome the government’s action to restore it,” she said.
“Casual workers are rightly paid a premium. Employees who have received a special loading as a casual, shouldn’t also be able to claim annual leave and redundancy entitlements.
“Casual work can be a convenient option for workers seeking greater freedom to choose their own hours, just as it helps keep businesses competitive, growing and employing more people.”
Depending on the ruling by the Federal Court and when it is handed down, the issue of casual employment and the Fair Work Act may become a key election issue, with a federal election due to be held in 2019.
Not long after the controversial judgement was made public, the NSW Business Chamber lodged a proposal with the Fair Work Commission to create a new type of employment in a bid to stop employers facing the double-dipping scenario.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.